NFIB End-of-Session Report on the 2023 Hawaii State Legislature

Advocacy team managed to stop or forestall many bills that would have added to the already-heavy regulatory burdens Main Street enterprises face. Governor has July 11 deadline to sign or veto legislation sent to him

The 2023 Hawaii State Legislative Session commenced on January 19 and concluded, sine die, May 4.

As a result of the 2022 election cycle, this Legislature included an influx of new members in both the House of Representatives and the Senate. The House welcomed 18 new members, representing more than one-third of that chamber’s total membership. The Senate added four new Senators, including Henry Aquino and Angus McKelvey, who were both members of the House of Representatives, and Brandon Elefante, who had just completed an eight-year tenure with the Honolulu City Council.

There were also notable changes in committee leadership across both chambers. In the House, new committee chairs and vice-chairs were appointed to the Finance, Water & Land, Consumer Protection & Commerce, and Judiciary & Hawaiian Affairs standing committees. The House also elected a new vice speaker, Greggor Illagan, and majority leader, Nadine Nakamura. Meanwhile, on the Senate side, there were changes to committee chairmanships in the Commerce & Consumer Protection and Energy, Economic Development & Tourism committees. Senate leadership primarily remained the same. A list of new legislative members can be found at the end of this report.

The 2023 legislative session proved to be a challenging one due in part to the arrival of newly elected legislators and committee assignments. Throughout the session, there were instances of conflict between committee chairs in both the House and Senate. The budget negotiations were not settled by the time the conference began, leading to a delay in all fiscal bills until the final days of the two-week conference period. As a result, several bills were deferred, including ones with substantial agreement between both chambers.

Over the course of the session, the House and Senate introduced a total of 3,132 bills. At the first crossover deadline, the midpoint of the legislative session, 428 bills had crossed over from the Senate to the House, while 311 had crossed over from the House to the Senate. In the end, 280 bills were passed by both chambers and transmitted to Gov. Josh Green for signature.

Governor Green now has until July 11 to determine whether he will sign, veto or allow the bills to become law without signature. The IA Hawaii legislative team was retained by NFIB just prior to first lateral deadline. IA and NFIB met to discuss priority issues that would direct the advocacy efforts during the 2023 Legislative Session, including paid sick and family leave, equal pay, online privacy/security and tourism. IA advocated on priority bills before legislators and worked with committee members, as well as House and Senate leadership, to defer the harmful bills and/or support the positive ones.

The following describes the priority issues under four categories and their results.

Employment

• Minimum Wage – House Bill 111/Senate Bill 230 would authorize each county to establish a higher minimum wage than the state minimum wage. The two bills were not scheduled for hearing.

• Labor – HB 207 would require employers with five or more employees to provide rest breaks under certain conditions. HB 207 was not scheduled for hearing in the LGO committee.

• Paid Sick Leave – HB 235 would require certain employers to provide a minimum amount of paid sick leave to employees to be used to care for themselves or a family member who is ill or needs medical care and supplemental paid sick leave to employees under certain public health emergency conditions. HB 235 was not scheduled for hearing by the LGO committee.

• Family Leave – HB 236/SB 360 would require the Department of Labor and Industrial Relations to establish and administer a family leave insurance program. Provides family leave insurance benefits and extends the period of family leave to 16 weeks for businesses that employ one or more employees who meet the hourly qualifications. Eliminates the previous threshold of 100 employees for employers to be subject to the family leave law. HB 236 was not scheduled for hearing; SB 360 was deferred by the LGO committee.

• Family Leave II – HB 490 would provide employed individuals with up to eight weeks of paid family leave during the first year after birth of the individual’s child, adoption of a child by the individual, or placement of a child with the individual through foster care, and eight weeks of paid family leave to care for the individual’s family member having a serious health condition during any benefit year, paid through an employer-based private insurance program currently used to provide for temporary disability benefits. Specifies that private employers having fewer than 200 employees shall not be required to provide family leave and family leave benefits. Repeals chapter 398, HRS. HB 490 was not scheduled for hearing.

• Leave Grant Program – HB 491 would require the Department of Labor and Industrial Relations to conduct an actuarial study on a leave grant pilot program to help small businesses offer their employees paid family leave and paid sick leave. HB 491 crossed over to the Senate but was not scheduled for hearing.

• Equal Pay – HB 745 would conform statutory prohibitions against wage discrimination with other prohibitions on employment discrimination. Clarifies allowable justifications for compensation differentials and remedies for pay disparity. Requires employers to disclose wage ranges to employees and prospective employees. Exempts wage disclosure and discussion from the prohibitions on employer retaliation or discrimination if knowledge of the wages stems from human resources, payroll, or legal professional responsibilities in the workplace. HB 745 was not scheduled for hearing by the LGO committee.

• Employee Benefits – HB 1409/SB 1007 would extend under certain conditions, the family leave period for up to eight weeks for employees who are unable to perform their employment duties due to the birth of a child who is required to stay in a neonatal intensive care unit. Requires the Civil Rights Commission to amend its rules to include neonatal care as a related medical condition wherever the phrase “pregnancy, childbirth, or other related condition” or any similar phrase is used. HB 1409 was sent to conference but no House conferees were appointed and the bill failed to meet the final deadline; SB 1007 was not scheduled for hearing.

• Fair Scheduling – SB 42 would require employers to provide employees with written notice of the employee’s shift schedule at least ten calendar days before the employee is scheduled to work, under certain circumstances. Requires certain employers to pay their employees twice as much as their regular rate of pay for time worked when their shift schedule was not timely given. SB 42 was deferred by the LBT committee.

Data Privacy

• Consumer Data Protection – HB 1497/SB 1110 would establish a framework to regulate controllers and processors with access to personal consumer data. Provides that a violation of the consumer data privacy act constitutes an unfair method of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. Provides for a written notice and thirty-day opportunity to cure a violation without any action being brought or penalties being incurred. HB 1497 failed to meet the first crossover deadline; SB 1110 was not scheduled for hearing by the joint CPN/JDC committee.

• Consumer Data Protection II – SB 974 would establish a framework to regulate controllers and processors with access to personal consumer data. Establishes penalties. Establishes a new consumer privacy special fund. SB 974 crossed over to the House but was not scheduled for hearing.

Tourism

• Tourism – HB 1375 would establish an Office of Tourism and Destination Management within the Department of Business, Economic Development, and Tourism that encompasses regenerative tourism and best practice destination management. Transfers the functions, duties, appropriations, and positions of the Hawai?i Tourism Authority to the Office of Tourism and Destination Management. Requires the Office of Tourism and Destination Management to implement certain county destination management action plans. Dissolves the Hawai?i Tourism Authority and the Board of Directors for the Hawai?i Tourism Authority. HB 1375 was sent to conference but conferees could not agree on amendments. Accordingly, the bill failed to meet the final deadline.

• Economic Development – HB 1376/SB 1522 would establish an Office of Tourism and Destination Management within the Department of Business, Economic Development, and Tourism that encompasses regenerative tourism and best practice destination management. Transfers the functions, duties, appropriations, and positions of the Hawai?i Tourism Authority to the Office of Tourism and Destination Management. Requires the Office of Tourism and Destination Management to implement certain county destination management action plans. Dissolves the Hawai?i Tourism Authority and the Board of Directors for the Hawai?i Tourism Authority. HB 1376 was not scheduled for hearing; SB 1522 was sent to conference but failed to meet the final deadline.

Miscellaneous Priority

• Accessibility – SB 753 would require retail establishments with an employee toilet facility to allow a customer suffering from an eligible medical condition to use that restroom during normal business hours under certain conditions. Establishes fines. SB 753 crossed over to the House but failed to meet the second lateral deadline.

• Labeling – HB 266/SB 113 would clarify that in calculating whether a product labeled “Made in Hawai?i” has met the requirement that at least fifty-one per cent of the wholesale value of the product is added by manufacture, processing, or production within the State, operating and overhead expenses incurred and spent within the State shall be included. Appropriates funds to promote and develop the “Made in Hawai?i” brand. HB 266 was deferred by the ECD committee; SB 113 crossed over to the House but was deferred by the CPC committee.

• Taxation – HB 389/SB 361 would establish a carbon sequestration income tax credit. HB 389 failed to meet the first crossover deadline; SB 361 was not scheduled for hearing by the AEN/EET/HHS joint committees.

Bills Enrolled to the Governor

Of the high priority bills tracked for NFIB this year, SB 1057 is the only bill that passed both chambers and was transmitted to Governor Green for his signature.

• Employment Earnings – SB 1057 would require certain job listings to include an hourly rate or salary range. Prohibits an employer from discriminating between employees because of any protected category established under state law, by paying wages to employees in an establishment at a rate less than the rate at which the employer pays wages to other employees in the establishment for substantially similar work.

NFIB worked with legislators and other organizations to amend the bill such that businesses with 50 or fewer employees are exempt from the salary range disclosure requirement. This compromise was agreed to by the committee chairs and ultimately passed as a CD1 version of the bill. The governor has 45 days to sign, veto or allow a bill to become law without his signature.
A complete list of all measures that have been transmitted/enrolled to the Governor is available here.

Preparation for 2024 Legislative Session

Looking ahead to the 2024 legislative session, we expect many of the same priority issues to emerge once again. As 2023 represented the initial year of the biennium, any bills that failed to advance through the legislature this year will persist into the next. Our legislative team will continue to engage with lawmakers and discuss pertinent issues, including minimum wage, paid sick and family leave, equal pay, online privacy/security and visitor impact bills, as well as commence preparations for the next session.

In addition, our advocacy efforts will involve educating legislators on the critical policy issues identified by NFIB. The legislative team will also implement an outreach including meetings with legislators and other like-minded organizations.

New Members of the Legislature